Make it worth it
The final piece for DeVito was giving his employees a benefit beyond more knowledge about their performance. He wanted to give them a tangible reward for buying in to this new evaluation system.
“You must link the objective measurements to compensation,” DeVito says. “You must not do anything different from department to department. We set a very strong companywide guideline. We laid out a matrix and went out and found the best practices that we could find, benchmarking salaries for every job, categorizing every job and created a range for every job. Then we created a scale for performance that was above, within or below and utilized a consistent link of compensation to performance across the company.”
Employees who do their job right need to be recognized for it. And employees who do something that benefits the company as a whole must also be compensated for that. Your system needs to take into account what the employee’s impact is on your organization.
“If your daily responsibilities can significantly impact the overall company results, then there is a mix between company and individual,” DeVito says. “But if you are an entry-level person and most of your work has an impact on your own output and it’s a long way removed from ultimate company profitability either because of the nature of your job or the extent of your responsibility, then there is a heavier weighting for the individual goal.”
You need to focus on objectivity in measuring the performance of an employee and whether he or she has met the standard.
“The more subjective your process is and the less frequent your communication is, the more surprised an employee can be when you ultimately explain to them that their performance is not adequate,” DeVito says. “Quite frankly, without objective measurements, I’m not so sure how accurately and honestly you can assess that.”
It’s a good idea to put someone in charge of monitoring the evaluation process and making sure that it’s continuing to be done effectively and consistently throughout, even after the newness begins to fade.
“Our HR director owns that responsibility,” DeVito says. “It is the HR director’s responsibility to assess the quality of the performance-based management criteria, communication and objectives during the course of every year. That is one of his goals to make sure that the process is fair and make sure it’s communicated effectively and make sure it’s linked fairly and transparently to compensation.”
After dropping a bit in 2008, registering $156.9 million in revenue, Baldwin & Lyons bounced back in 2009 with $232.7 million. It’s your ability to keep pushing an initiative forward, while tweaking it with feedback from your team, that leads to successful change implementation.
“It’s absolutely important that people understand you have a principled approach to making decisions and solving problems,” DeVito says. “You certainly accept input, but at the end of the day, it’s important that you’re decisive. You listen to everyone, but ultimately, you make your own decisions.”
How to reach: Baldwin & Lyons Inc., (800) 644-5501 or www.baldwinandlyons.com
